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Montana Administrative Register Notice 42-1010 No. 21   11/08/2019    
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BEFORE THE DEPARTMENT OF REVENUE

OF THE STATE OF MONTANA

 

In the matter of the amendment of ARM 42.19.401, 42.19.402, 42.19.405, and 42.19.407, and the repeal of ARM 42.19.403 and 42.19.404 pertaining to property tax assistance program (PTAP) and Montana disabled veteran (MDV) property tax assistance program

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NOTICE OF PUBLIC HEARING ON PROPOSED AMENDMENT AND REPEAL

 

TO: All Concerned Persons

 

1. On December 3, 2019, at 10:00 a.m., the Department of Revenue will hold a public hearing in the Third Floor Reception Area Conference Room of the Sam W. Mitchell Building, located at 125 North Roberts, Helena, Montana, to consider the proposed amendment and repeal of the above-stated rules. The conference room is most readily accessed by entering through the east doors of the building.

 

2. The Department of Revenue will make reasonable accommodations for persons with disabilities who wish to participate in this public hearing or need an alternative accessible format of this notice. If you require an accommodation, please advise the department of the nature of the accommodation needed, no later than 5 p.m. on November 15, 2019. Please contact Todd Olson, Department of Revenue, Director's Office, P.O. Box 7701, Helena, Montana 59604-7701; telephone (406) 444-7905; fax (406) 444-3696; or todd.olson@mt.gov.

 

3. The rules as proposed to be amended provide as follows, new matter underlined, deleted matter interlined:

 

42.19.401 PROPERTY TAX ASSISTANCE PROGRAM (PTAP) AND MONTANA DISABLED VETERAN (MDV) PROPERTY TAX ASSISTANCE PROGRAM (1) The property owner of record or the property owner's agent must make application to the local department office to receive the PTAP benefit provided for in 15-6-305, MCA or the MDV benefit provided for in 15-6-311, MCA.

(2) The PTAP benefit is administered through a reduced property tax rate that applies to the first $200,000 or less of the appraised value of the applicant's residential real property. The MDV benefit is administered through a reduced property tax rate that applies to the residential real property of a qualified veteran or qualified veteran's spouse as provided for in 15-6-301 and 15-6-311, MCA.

(a) remains the same.

(b) Eligible property may include a If the primary residence is a mobile or manufactured home and that is assessed the separately assessed from the land upon which it is located, both the mobile or manufactured home and the land upon which it is located may qualify for the benefit if only if the mobile or manufactured home and land they are both owned by the applicant. If the land is not owned by the applicant, the benefit applies only to the mobile or manufactured home. To be eligible, the property must be:

(i) through (5) remain the same.

(6) A temporary stay in a nursing home or similar facility will not change an applicant's primary residence for the purposes of the PTAP or MDV benefits.

(7) The PTAP benefit does not transfer to the new owner of the dwelling.

(8) through (11) remain the same.

(12) The department may waive the April 15 application deadline at any time the department's local office or the Office of Taxpayer Assistance department's taxpayer advocate consults with local aging services or disability offices and confirms a hardship case exists. The department must document its finding.

(13) remains the same.

(14) Each year the department will:

(a) verify the qualifying income and eligibility of PTAP applicants and participants;

(b) and (c) remain the same.

(d) advise taxpayers of their right to appeal the department's determination to the State Montana Tax Appeal Board within 30 days of receiving a determination letter.

(15) The information PTAP applicants provide the department is subject to the false swearing penalties established in 45-7-202, MCA. The department:

(a) through (16) remain the same.

 

AUTH: 15-1-201, 15-6-302, MCA

IMP: 15-6-301, 15-6-302, 15-6-305, 15-6-311, 15-6-312, MCA

 

REASONABLE NECESSITY: The department proposes amending ARM 42.19.401 by consolidating similar content from ARM 42.19.403 into the rule for efficiency. The department will propose the repeal of ARM 42.19.403 based on these amendments.  The department also proposes updating the rule's catchphrase to reflect the rule's new content, as required by ARM 1.2.214, and updating the references to the Office of Taxpayer Assistance in (12) and the State Tax Appeal Board in (14)(d) to the department's Taxpayer Advocate and Montana Tax Appeal Board, respectively.

The department is updating the implementing citations, in accordance with 2-4-305, MCA, to correspond with the rule amendments.

 

42.19.402 INFLATION ADJUSTMENT FOR PROPERTY TAX ASSISTANCE PROGRAM (PTAP) AND FOR MONTANA DISABLED VETERAN (MDV) PROPERTY TAX ASSISTANCE PROGRAM (1) Sections 15-6-301, and 15-6-305, and 15-6-311, MCA, provide property tax relief to low income homeowners, qualified disabled veterans, and qualified veterans' spouses. Sections 15-6-301, and 15-6-305, and 15-6-311, MCA, also require the department to annually adjust the income schedules used to determine the eligibility and the amount of relief to account for the effects of inflation.

(2) The calculation of the inflation adjustment shall be made on a yearly basis as follows:

(a) Sections 15-6-301, and 15-6-305, and 15-6-311, MCA, specify that the implicit price deflator for personal consumption expenditures (PCE), published quarterly in the Survey of Current Business by the Bureau of Economic Analysis of the U.S. Department of Commerce, is to be used in the calculation of the inflation factor.

(b) remains the same.

(c) The inflation factor, calculated per the previous section, is used to annually adjust the base year income schedules for the effects of inflation.

 

Each income figure in the base year income schedule is multiplied by the inflation factor calculated for the tax year in question in order to update the schedule. The product is then rounded to the nearest whole dollar amount.

 

            (3)  The base year income schedule for PTAP as provided in 15-6-305, MCA, is as follows: below.

 

----------- PTAP Base Year Income Schedule -------------

 

Single Person

 

 

   Head of Household or Married Couple

 

 

Percentage Multiplier

 

$0 - $8,413

 

$0 - $11,217

 

20%

$8,414 - $12,900

 

$11,218 - $19,630

 

50%

$12,901 - $21,032

 

$19,631 - $28,043

 

70%

 

(4) The base year income schedule for MDV as provided in 15-6-311, MCA, is as follows:

 

----------- MDV Base Year Income Schedule -------------

 

Single Person

 

 

   Head of Household or Married Couple

 

 

 

Surviving Spouse

Percentage Multiplier

 

$0 - $37,404

 

$0 - $44,885

 

$0 - $31,170

0%

$37,405 - $41,145

 

$44,886 - $48,626

 

$31,171 - $34,911

20%

$41,146 - $44,885

 

$48,627 - $52,366

 

$34,912 - $38,651

30%

$44,886 - $48,626

 

$52,367 - $56,107

 

$38,652 - $42,392

50%

 

 

AUTH: 15-1-201, MCA

IMP: 15-6-191, 15-6-301, 15-6-305, 15-6-311, MCA

 

REASONABLE NECESSITY: The department proposes amending ARM 42.19.402 by consolidating similar content and adding the MDV inflation adjustment information from ARM 42.19.404 into the rule for efficiency. The department will propose the repeal of ARM 42.19.404 based on these amendments.  The department also proposes updating the rule's catchphrase to reflect the rule's new content, as required by ARM 1.2.214. The department is updating the implementing citations, in accordance with 2-4-305, MCA, to correspond with the rule amendments.

 

42.19.405 DEFINITIONS The following definitions apply to rules in this subchapter.

(1) remains the same.

(2) "Percentage reduction" means the amount by which the property tax rate is reduced based on the income schedules found in:

(a) ARM 42.19.402 for the property tax assistance program (PTAP) and for the Montana disabled veteran (MDV) property tax assistance program. Those schedules are located in ARM 42.19.402. ; or

(b) ARM 42.19.404 for the Montana disabled veteran (MDV) property tax assistance program.

(3) through (5) remain the same.

 

AUTH: 15-1-201, 15-6-302, MCA

IMP: 15-6-134, 15-6-240, 15-6-301, 15-6-302, 15-6-305, 15-6-311, 15-6-312, MCA

 

REASONABLE NECESSITY: The department proposes amending ARM 42.19.405 to consolidate the PTAP and MDV program descriptions for efficiency, and which reflect the department's proposed amendments to ARM 42.19.401 and 42.19.402.  The department is updating the implementing citations in accordance with 2-4-305, MCA, to correspond with the rule amendments.

 

42.19.407 INTANGIBLE LAND VALUE PROPERTY TAX ASSISTANCE PROGRAM FOR RESIDENTIAL PROPERTY (1) through (5) remain the same.

(6) As described in 15-6-240, MCA, if the department's appraised value of the land is greater than 150 percent of the appraised value of the primary residence and improvements situated on the land, then the land is valued at 150 percent of the appraised value of the primary residence and improvements, subject to the following:

(a) remains the same.

(b) Parcels of land exceeding five acres in size do not qualify unless the department's appraised value of the first five acres which support the primary residential improvements is greater than 150 percent of the appraised value of the primary residence and improvements situated on the land.  In such cases, any land in excess of five acres remains valued at its market value.

(7) and (8) remain the same.

 

AUTH: 15-1-201, MCA

IMP: 15-6-240, 15-6-301, MCA

 

REASONABLE NECESSITY: The department proposes amending ARM 42.19.407 to insert language in (6)(b) clarifying how the department is applying the exemption to parcels of land that are over five acres in size but would have met all other criteria for qualification had the parcel been only five acres.  The department believes the proposed amendment is necessary because statute does not clearly address how the exemption is applied to parcels of land greater than five acres.  The proposed amendment provides that the exemption is only applied to five acres regardless of the parcel's size.

 

4. The department proposes to repeal the following rules:

 

            42.19.403 MONTANA DISABLED VETERAN (MDV) PROPERTY TAX ASSISTANCE PROGRAM

 

            AUTH: 15-1-201, 15-6-302, MCA

IMP: 15-6-301, 15-6-302, 15-6-311, 15-6-312, MCA

 

            REASONABLE NECESSITY: The department proposes repealing ARM 42.19.403 because the department has determined that separate rules for the PTAP and MDV programs are unnecessary and the department's proposed amendments to ARM 42.19.401 to consolidate this similar subject matter make for more efficient rule organization.

 

            42.19.404 INFLATION ADJUSTMENT FOR MONTANA DISABLED VETERAN (MDV) PROPERTY TAX ASSISTANCE PROGRAM

 

AUTH: 15-1-201, MCA

IMP: 15-6-301, 15-6-311, MCA

 

            REASONABLE NECESSITY: The department proposes repealing ARM 42.19.404 because the department has determined that separate rules for the PTAP and MDV programs are unnecessary and the department's proposed amendments to ARM 42.19.402 to consolidate this similar subject matter make for more efficient rule organization.

 

            5. Concerned persons may submit their data, views, or arguments, either orally or in writing, at the hearing. Written data, views, or arguments may also be submitted to: Todd Olson, Department of Revenue, Director's Office, P.O. Box 7701, Helena, Montana 59604-7701; telephone (406) 444-7905; fax (406) 444-3696; or e-mail todd.olson@mt.gov and must be received no later than December 13, 2019.

 

6. Todd Olson, Department of Revenue, Director's Office, has been designated to preside over and conduct the hearing.

 

7. The Department of Revenue maintains a list of interested persons who wish to receive notices of rulemaking actions proposed by this agency. Persons who wish to have their name added to the list shall make a written request, which includes the name and e-mail or mailing address of the person to receive notices and specifies that the person wishes to receive notice regarding particular subject matter or matters. Notices will be sent by e-mail unless a mailing preference is noted in the request. A written request may be mailed or delivered to the person in number 5 above or faxed to the office at (406) 444-3696, or may be made by completing a request form at any rules hearing held by the Department of Revenue.

 

8. An electronic copy of this notice is available on the department's web site at www.mtrevenue.gov, or through the Secretary of State's web site at sosmt.gov/ARM/register.

 

9. The bill sponsor contact requirements of 2-4-302, MCA, do not apply.

 

10. With regard to the requirements of 2-4-111, MCA, the department has determined that the amendment and repeal of the above-referenced rules will not significantly and directly impact small businesses.

 

 

/s/ Todd Olson                                              /s/ Gene Walborn                                        

Todd Olson                                                   Gene Walborn

Rule Reviewer                                              Director of Revenue

 

Certified to the Secretary of State October 29, 2019.

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